KUTTNER: The problem is, (the 3/4 point drop) won't fix what's broken. You've got all of these structural problems with bank balance sheets because the bank sponsored this orgy of speculative spending. And they've lost tens of billions of dollars. You know a balance sheet is a balance sheet. The idea that Citigroup can have something that's off balance sheet. If you and I apply for a loan and we say to the creditor, well, some of my stuff is off balance sheets, I didn't tell you that, we'd go to hail. This smack of Enron and the damage of all this stuff is going to cascade on the rest of the economy.

DOBBS: Robert Kuttner is referring to the collateralized debt obligations, more securitized debt, the misapplication of which Professor Siegel we have seen the ramifications for just about 30 years in this country. Why in the world aren't the regulators in this marketplace, why aren't they regulating these institutions? And why in the world is this government, in both political parties, permitting this kind of unadulterated, unfettered capitalism to rape this country?

SPIEGEL: Well, certainly we had too much lending, mostly against housing. And a case can be made, that Greenspan sat back without saying anything, saying, oh, the markets will take care of it. The world markets will take care of it and ignoring it. And there can be a case made on that.

DOBBS: Where are the free marketeers now? Where are those faith-based economists who said let Mr. Market smile and everything will be fine?

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KUTTNER: Well, they look like damn fools, as they ought to. And we've some had foxes in chicken coops for third years often under republicans and sometimes democrats. We've had regulators who didn't believe in protecting the consumer.

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